Highmark Health posts record 6-month performance with $505M operating surplus


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Pittsburgh-based Highmark Health, the parent company of insurer Highmark and Allegheny Health Network, reported an operating gain of $505 million in the first six months of fiscal year 2017, compared to $35 million the same period last year.

“Highmark Health delivered its strongest financial performance for the six-month period ending June 30 since the formation of Highmark in 1996,” Karen Hanlon, executive vice president and CFO of Highmark, said.

Highmark attributed its financial turnaround to improvements in its government health plan business, as well as its commercial and senior health plan segments. The company’s nealry 5 million-member health plan achieved an operating gain of $480 million in the six months ended June 30, up $399 million compared to the same period a year prior, mostly fueled by its government business.

On the provider side, Highmark’s Allegheny Health Network in Pittsburgh saw its strongest financial performance since its establishment. AHN recorded $28 million in excess revenue over expenses in the first six months of this year, an improvement of $47 million from the same period in 2016.

While intentional enrollment reductions decreased Highmark’s operating revenues year-over year by $100 million to $9.1 billion in the six-month period, at the same time the organization’s expenses dropped $50 million. Highmark attributed the decrease to reduced costs related to its Epic EHR and other technology implementations.

Gut check: Change is coming, and healthcare executives don’t necessarily think it’s a bad thing



The future of healthcare policy is a bit murky these days. President-elect Donald Trump has pledged to repeal the Affordable Care Act, and the Republican-run U.S. Congress is already fast at work to make that happen.

What’s not known, however, is what will change for the thousands of U.S. healthcare businesses that have not only adapted to the ACA but also made millions in investments in areas such as electronic health records, value-based reimbursement and reporting to align with the policies of the outgoing administration.

Healthcare Finance spoke with several executives at healthcare businesses to get their perspectives on not only the changes they expect but also their thoughts on what the healthcare sector actually needs to do to provide the best care while still safeguarding the health of its business model.


8 key strategies for improving a hospital’s margins


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As healthcare shifts toward value-based care, hospitals are looking for new ways to improve quality without unnecessarily increasing the cost of care.

“We think less about cost cutting and more about margin improvement,” says Allen Miller, CEO of COPE Health Solutions. “Folks are going to be more successful taking a strategic approach and focusing on improving margins by taking risks and building the type of infrastructure that will support value based contracts through which they take financial risk instead of the traditional cost-cutting approach.”

Here are some key strategies for financial success:

3 ways hospitals must prepare for a likely recession



Bad economic times are coming, says Jeff Goldsmith, Ph.D.

The U.S. is in the 89th month of an economic recovery–among the longest since World War II–which means a recession is overdue and healthcare organizations should prepare now, writes Goldsmith, a national adviser to Navigant Healthcare, in Hospitals & Health Networks.

Healthcare systems can get ready for that inevitable economic downturn by taking the following steps:

Look for ways to do more with less. Healthcare organizations can expect to live with slow or shrinking revenues. Scrutinize physician compensation and productivity. Reduce layers of management and examine contracts for supplies and services.

Tighten up revenue cycle functions.  Improve your patient collections process. Make payment obligations clear to patients and ensure that billing staff keep better track of denied claims from insurance companies.

Fight for health policies that work for healthcare organizations. Lobby members of Congress, state legislators and governors to protect Medicaid funding. “Hospitals must insist that policymakers keep their commitments when times are tough,” Goldsmith says.

Dignity faces losses, liabilities and growing competition


The area’s third-largest private-sector employer faces financial challenges that could lead to cuts in its local workforce of 7,800, observers say

How Small Ideas Are Helping to Bend the Health Care Cost Curve


Even as overall U.S. health care spending grew by 5.3 percent in 2014 – reaching a jaw-dropping $3 trillion — the healthcare industry has made some important strides in trying to bend the overall cost curve in the coming years, according to some experts. Since the advent of the Affordable Care Act in 2010, for instance, the move away from so-called fee-for-service that maximizes costs for insurers and patients by encouraging excessive billings has begun to make some inroads in overall spending.

Scripps begins to stabilize as it undertakes restructuring


Scripps Health

Scripps Health’s operating performance is starting to stabilize as the San Diego-based system takes steps to get its costs under control. The four-hospital group is restructuring and plans to eliminate about 100 jobs.  Scripps CEO Chris Van Gorder notified employees in a memo earlier this year that the job cuts will come mostly from management and administration. The system spent nearly $2.4 million on restructuring costs in the quarter ended March 31, according to its quarterly earnings report.

How Yale-New Haven Health System Cut Spending by Millions


Source: Yale-New Haven Health System

Embarking on a “quest for unparalleled value,” YNHHS has pared down spending system-wide in four categories.